19 Audit evidence is all the information used by auditors in arriving at the conclusions on which the audit opinion is based. Which one of the following is considered as a highly reliable source of evidence as these come from independent third party? d out of a. Observing the inventory count b. Inspection of records and documents OC. Analytical procedure O d. External confirmation 20 You are required to identify from the following, the audit procedures auditor compares the current year financial statements with the previous year's and calculate the variance to identify the abnormal differences or trend? -ut of O a. Inspection of records and documents b. Physical Examination/Observation O c. External confirmation O d. None of the options 21 The auditor will ascertain the internal control system to assess whether it is likely to be reliable. If so, they will test the controls to ensure they are in place and working effectively. Which of the following would not be a control in a sales system? d out of O a. Approval of credit limits for new customers from a manager before being allowed credit O b. Batch totals required when inputting sales invoices onto the system c. Agreeing details from the sales order when preparing the goods to be dispatched to the customer O d. The sales clerk alone deciding whether to give discounts or not to customers On 21 The auditor will ascertain the internal control system to assess whether it is likely to be reliable. If so, they will test the controls to ensure they are in place and working effectively. Which of the following would not be a control in a sales system? Fed out of on a. Approval of credit limits for new customers from a manager before being allowed credit O b. Batch totals required when inputting sales invoices onto the system c. Agreeing details from the sales order when preparing the goods to be dispatched to the customer Od. The sales clerk alone deciding whether to give discounts or not to customers on 22 Which of the following is the best definition of corporate governance? ed out of on O a. The system and mechanism for implementing internal control in a company O b. The principles and standards for preparing the financial statements of a company O c. The system and mechanism for establishing an internal audit department in a company O d. The systems, policies and procedures by which a company is operated, managed and controlled